I don't know if you're being very fair. Rechargable batteries are tricky things, if you charge them too often, too soon, not often enough, not soon enough, their life can be greatly reduced, never mind the fact that they sat unused for 6 - 10 weeks.
Your main issue appears to be that the company won't honor a year long warranty after it had expired. If it's outside the warranty, then that's that. It's not a lifetime guarantee, it's good for one year. That means that whether it breaks 366 days after purchase or 5 years after, it doesn't matter.
If they let you and your 13 months slide because it's only a month after the warranty expired, then they should also let the next guy's 14 months slide because it's only a month after they honored your past due warranty. You see the slippery slope here? The one year mark is just that, a deadline. Sure, it stinks if you fall just to the bad side of the timing, but that happens sometimes. That's life. If this happened 364 days after purchase and they told you no, that's a completely different story.
What should you do? You buy a replacement battery and call it a day.
Frustrating? Yes. Rip-off? No.